The highly volatile shares of renewable energy company Spi Energy Co Ltd SPI were rallying Tuesday morning.
What Happened: Santa Clara, California-based SPI Energy said its board has approved a plan to spin-off wholly owned Solar Juice Co. subsidiary through an initial public offering.
Solar Juice is engaged in the business of selling solar PV panels, solar inverters, energy storage EV chargers and complete solar systems and renewable energy solutions for residential and small commercial markets.
The company's business is concentrated in the Asia-Pacific and Americas region.
The company will retain a majority stake in the subsidiary after the spin-off, it said.
Related Link: SPI Energy Surges Again On Electric Pickup, Logistic Vehicle Manufacturing Deal
SPI Energy also said it has reached a settlement with minority shareholders of Solar Juice Australia, in which it owns an 80% stake. Consequently, legal proceedings have been dismissed, SPI Energy said.
The settlement relates to new rights issue undertaken by Solar Juice Australia, removal of SPI shareholders Kun Fong Lee and Mr. Jinhan Zhou from the board of the Australian subsidiary and the appointment of an additional director.
Why It's Important: The spin-off of Solar Juice, according to SPI Energy, will unlock greater value.
The settlement agreement with the Australian subsidiary is positive for SPI Energy, as it removes a legal overhang — especially ahead of a planned spin-off.
SPI Price Action: SPI Energy shares were soaring 13.98% to $9.05 at the time of publication Tuesday.
Related Link: Why SPI Energy's Stock Is Trading Higher By 1800% Today
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